RBI eases norms for foreign investors

 To enhance the depth of the foreign exchange market, the Reserve Bank today allowed foreign investors to participate in the domestic exchange-traded currency derivatives, a segment where volumes have declined.

"With a view to improving the depth and liquidity in the domestic foreign exchange market, it has been decided to allow foreign portfolio investors to participate in the domestic exchange-traded currency derivatives market to the extent of their underlying exposures plus an additional $ 10 million," the Reserve Bank of India said in its Second Bi-Monthly Monetary Policy Statement.

"It has also been decided to allow domestic entities similar access to the exchange-traded currency derivatives market," it said. The RBIhad in July last year imposed curbs such as doubling of margin requirement and a ceiling on position limits on exchange-traded currency derivatives.

The restrictions were imposed to check speculation in the foreign-exchange market.